Net-Metered Distributed Renewable Energy: A Peril for Utilities?
研究净计量政策下分布式可再生能源对公用事业公司利润和社会福利的影响，发现当考虑批发市场动态时，分布式可再生能源可能反而提升公用事业利润。
Electricity end-users have been increasingly generating their own electricity via rooftop solar panels. We study the impact of such distributed renewable energy (DRE) on utility profits and social welfare under net metering, which is a widespread policy in the United States. Utilities have been lobbying against net-metered distributed solar based on the common belief that it harms utility profits. We find that when wholesale market dynamics are considered, net-metered DRE may be a positive for utilities. That is, net-metered DRE strictly improves the expected utility profit when the utility’s self-supply is below a threshold and the wholesale electricity price is sufficiently responsive to wholesale demand fluctuations. Our paper distinctively considers both downstream and upstream impacts of net-metered DRE on utilities and analyzes the tradeoff between these impacts. Net-metered DRE can increase utilities’ expenses because of their required buyback from generating customers, and reduces their retail sales revenues. In addition, it can either reduce utilities’ wholesale procurement costs or affect their wholesale market revenues. Our results suggest that utilities might benefit from emerging business strategies that motivate their customers to install solar panels. Our numerical study uses data on the distributed solar in California and the wholesale electricity market operated by the California Independent System Operator, and demonstrates that our findings hold under realistic parameters. This paper was accepted by David Simchi-Levi, operations management.